Employer-Sponsored HSAs & HRAs

What is the difference between a Health Savings Account (HSA) and a Health Reimbursement Arrangement (HRA)? Use this chart to compare these health insurance plan options.

Feature	HSA	HRA
Who is eligible to participate?	Employees who are covered by a high-deductible health plan. For 2009, the IRS defines that as a health plan with a deductible of at least $1,150 for individuals or $2,300 for families. The employee cannot be covered under other health plans, cannot be enrolled in Medicare, and cannot be claimed as a dependent on someone else's tax return. For 2010, deductibles will be at least $1,200 for individuals or $2,400 for families.	All employees. There are special issues that affect participating principals of employers organized as S corporations, partnerships, LLCs, and sole proprietorships.
Who owns the account?	The employee.	The employer.
Who is eligible to make contributions?	The employee, the employer or both.	Only the employer.
What are the contribution limits?	For 2009, eligible individuals may contribute a max of $3,000 for self-only coverage and $5,950 for family coverage, regardless of the deductible under the high-deductible health plan (HDHP). Catch-up contributions are permitted for individuals 55 years old and older. For 2010, maximum contributions will be $3,050 for self-only coverage and $6,150 for family coverage.	The employer is allowed to determine contribution limits.
What are considered covered expenses?	All qualified medical expenses (as defined in Section 213(d) of the Internal Revenue Code), COBRA premiums, health plan coverage while receiving unemployment compensation, Medicare premiums and expenses (no Medigap premiums), and qualified long-term care premiums.	The employer is allowed to define covered expenses. Covered expenses can include all Internal Revenue Code Section 213(d) qualified medical expenses; health insurance premiums for current employees, retirees and COBRA beneficiaries; and qualified long-term care premiums.
May unused balances be rolled over for future plan years?	Yes. The rollover is automatic.	The employer is allowed to define whether all or part of the balance may be rolled over.
Are there requirements as to which type of health plan is offered?	Yes. Employees must be enrolled in a high-deductible health plan with a deductible of $1,150 or higher for an individual, $2,300 or higher for a family (2009) or $1,200 or higher for an individual, $2,400 or higher for a family (2010).	No. However, most HRAs are offered in tandem with a high-deductible plan.